The question arose in response to a Reuters article from last week saying that Netflix was meeting with cable operators about having them offer the service on their system. Close observers of this cat-and-mouse game will recall that this issue first came up at last year's Cable Show when Time Warner Cable's Melinda Witmer...speculated...mused...about exactly that. On some level, it makes a great deal of sense (see an earlier post Netflix on Cable - How Could That Work?. Note that Time Warner Cable, while sharing a name or two with Time Warner, Inc., is no longer owned by the company (which owns many cable networks in its HBO and Turner Broadcasting units). As Seinfeld fan, Todd Spangler points out, what's good for Comcast is often different from what is good for every other cable operator.
Comcast, with its acquisition of NBC Universal is the largest media company in the world. It has lots of content to go along with lots of conduit. The idea of giving all that valuable distribution to a competitor like Netflix is...not their first choice. From a value creation point-of-view, I applaud. (It is a move out of the TCI handbook.) If successful, down the road Comcast will be able to sell Streampix to Netflix for a wad of stock in, and a favorable affiliation agreement with, Netflix (which will shut down Streampix after it buys it). The public relations aspect of this position, however, seems a bit tone-deaf. "We are in discussions with programmers of every stripe" might have been better. In contrast, Comcast's public relations of its diversity channel commitments (as part of the NBCU merger), were handled so deftly, the deal's biggest foe in Congress praised them.
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